Why Bad Things Happen to Clean-Energy Startups

[font size=4]New technologies for storing power from wind and solar farms will be key to a clean-energy future. But Aquion Energy’s recent bankruptcy shows the market challenge of making that happen.[/font]

by James Temple June 19, 2017

[font size=3]By all measures that usually matter, Aquion Energy should have succeeded.

The startup, which sold big batteries for renewable projects and power grids, was founded by Jay Whitacre, a materials science professor at Carnegie Mellon who previously developed batteries for Mars rovers at NASA. It raised nearly $200 million from prominent investors, including Bill Gates, and venture capitalists at Kleiner Perkins and Shell. Perhaps most important of all, the company entered the market with a clear-eyed awareness of earlier missteps by battery startups. It took pains to avoid the use of rare materials. It relied on repurposed manufacturing equipment. And it identified niche markets where it might gain a foothold.

But on March 8, after failing to raise additional funding, Aquion filed for bankruptcy protection, cut 80 percent of its staff, and halted manufacturing. It was the latest of several stumbles for venture-backed storage startups. EnerVault, which was developing what are known as flow batteries, put itself up for sale after failing to find additional investors in 2015. Later that year, liquid-metal battery startup Ambri laid off a quarter of its staff. Around that same time, LightSail Energy, which was struggling to develop technology to store energy as compressed air in carbon-fiber tanks, pivoted to selling its containers to natural-gas suppliers. Taken together, these struggles have deflated hopes for the emergence of affordable and practical grid storage anytime soon.

And that’s a problem. Without cheap ways of storing excess energy generated from intermittent sources like wind and sun, there are limitations on how much these renewable sources of power can contribute to the grid’s overall electricity generation—and, by extension, how much we can cut the greenhouse-gas emissions driving climate change. There are already days when California solar farms have to shut down because they’re generating more power than the grid can use at a particular time. And yet the system still needs to run enough fossil-fuel backup plants to meet total demand whenever the sun dips behind clouds.